SpiceJet eyes e-commerce logistics business

SpiceJet has readied plans to cash in on the ecommerce boom, as the nofrills carrier looks for new streams of revenue after a near-death experience more than a year ago.Mihir Mishra | ET Bureau | February 10, 2016, 09:11 IST

SpiceJet has readied plans to cash in on the e-commerce boom, as the no frills carrier looks for new streams of revenue after a near-death experience more than a year ago.

The Gurgaon-based airline plans to buy 100 mini trucks and open as many as 40 warehouses across the country to provide fast delivery options to the click-happy Indian consumer who increasingly buys everything from groceries to expensive gadgets from ecommerce platforms.

SpiceJet, which is the first airline to plan such a move, will use the mini trucks, all Tata 407s, to provide connectivity between warehouses and airports. The infrastructure will provide the much-needed backbone to its air cargo plans.

The airline didn’t respond to an e-mail seeking comment. Analysts warn that SpiceJet should keep its focus on the core areas of operations and not on non-core businesses.

It is not just the belly of the aircraft that the Ajay Singh promoted airline is trying to fill with cargo. It is also experimenting to carry cargo, especially related to e-commerce companies, inside the cabin, strapped to seats.

“A pilot (study) was conducted on the Bengaluru-Mumbai late-night flight last month,” said an executive aware of the development.

There are various issues around carrying the cargo by fixing it to the seat through ropes, first one being the damage it causes to the seat, the executive said.

With moves like these, the airline is also targeting an increase in its ancillary revenue that has increased to about 17% as of today from about 6% a year ago. Analysts said the plan may work if the focus is on distribution and not on creating infrastructure for the operations.